After general and life insurance, Paytm seeks a P2P lending license


Payment major Paytm has been facing stiff competition on digital payment front as global giants Google and WhatsApp have made debuts with the UPI-enabled payment system.

Besides competing with the aforementioned companies, Flipkart-owned PhonePe, on the other front, is also challenging the dominance of the Noida-based company.

Over the past couple of years, Paytm had developed a moat to some extent through an e-wallet in a digital payment ecosystem. But, that seems to be bridged by competitors with the emergence and quick adoption of UPI.

Nevertheless, the Vijay Shekhar Sharma-led company is exploring several financial services to maintain a strong grip on the fledgeling fintech segment in India.

After incorporating separate entities for selling the financial product (Paytm Money), life insurance (Paytm Life Insurance), and general insurance, the SoftBank-backed company is seeking a license from RBI to float a peer-to-peer lending platform.

Peer to peer lending platform enables people to borrow credit from individuals listed as lenders. Currently, several P2P lending platforms including Faircent, Loanmeet, and Lendbox are operating in the space. With P2P platform, Paytm is eyeing the nascent stage, which is slated to touch $5 billion industry by 2023.

“To carry on the business of NBFC-P2P lending platform as an intermediary to provide the services of loan facilitation via web or app medium or otherwise…” quotes an ET report citing RoC filings.

Also read: Will Paytm mirror Alibaba-backed digital insurance major Zhong An in India?

Currently, leveraging the partnership with NBFCs Paytm has been facilitating loans to it seller base. Notably, the apex banking body RBI had included peer to peer platforms as NBFC last year.  If Paytm gets approval for launching P2P platform, it will also posses NBFC license.

With a suite of financial, insurance and lending products, the company is eyeing a bigger play in a long run. Making entry into these segments is an obvious choice for Paytm as it has access to capital, technology (via Alibaba and its affiliates) and resources required to disrupt financial, insurance and lending services.

Importantly, Paytm has a lot of data on consumer payment behaviour and transaction patterns. It will leverage the power of data in cross-selling insurance, financial products, and lending. The company’s interests in P2P lending space will provide the much-needed exposure to others startups in the segment. Its entry can also trigger consolidation in the nascent P2P lending segment.

The development was first reported by ET.

Send Suggestions or Tips